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By YourBest Editorial Team · Updated October 22, 2026 · How we rank

Guide · Medicare.gov & IRS rules

Working Past 65: Medicare, Your Job Plan and Your HSA

If you have health coverage through a current job, you may be able to delay Part B without a penalty. Get the timing wrong and you can face a lifetime penalty, a gap in coverage or an IRS problem with your HSA. Here are the rules.

20employees: below this, Medicare usually pays first and you need Part B

8 monthsto sign up for Part B after the job or its coverage ends

6 monthshow far back Part A can start, which matters for HSAs

Can you delay Part B?

Yes, if you (or your spouse) are still working and covered by that employer’s group health plan. Coverage must be based on current employment. Retiree coverage and COBRA don’t count, and delaying Part B with only those can leave you with a late enrollment penalty of 10% for each full 12 months.

20 or more employees: the job plan pays first. Most people take premium-free Part A and delay Part B.
Fewer than 20 employees: Medicare usually pays first. If you skip Part B, the employer plan can refuse to pay what Medicare would have paid. Sign up for Part B at 65 unless the plan confirms in writing that it pays first.

When the job ends

You get a Special Enrollment Period of 8 months to sign up for Part B, starting the month after your employment or the group coverage ends, whichever comes first. Sign up before the coverage ends so there’s no gap. Your employer fills out form CMS-L564 to show you had coverage. Your 6-month Medigap Open Enrollment starts when Part B begins, so this is also when you can buy any Medigap policy at the standard price.

COBRA is the common trap. COBRA doesn’t extend the 8-month window. If you keep COBRA past it without signing up for Part B, you can owe the Part B penalty for life, and once you have Medicare, COBRA may end or pay only after Medicare would have. See COBRA vs. a Marketplace plan.

Stop HSA contributions 6 months early

Once you’re enrolled in any part of Medicare, your HSA contribution limit is zero. That includes retroactive coverage: if you sign up for Part A after 65, it starts up to 6 months before the month you apply (but not before the month you turned 65). Contributions made during those months are excess contributions, which the IRS taxes until you take them out.

Pick the month you’ll apply for Medicare (or start Social Security, which enrolls you in Part A automatically).
Make your last HSA contribution, and your employer’s, at least 6 months before that month.
For the year Medicare starts, your limit is prorated by the months before Medicare. The 2027 limit is $4,500 for self-only coverage, $9,000 for family, plus $1,000 if you’re 55 or older.
Keep the money. You can spend your HSA tax-free on Medicare premiums (Parts B and D, Advantage plans, not Medigap), deductibles and copays.

Drug coverage and Part D

You can skip Part D without a penalty while your job plan’s drug coverage is “creditable” (at least as good as standard Part D). Your plan sends a yearly notice saying whether it is. Keep those notices; after the job ends you have 63 days to join a Part D plan before the penalty starts to build. Run the numbers with our late enrollment penalty calculator.

Questions

Should I take Part A at 65 if I’m still working?

Usually yes if you don’t contribute to an HSA, because Part A is premium-free for most people and can act as secondary coverage for hospital stays. If you or your employer still contribute to an HSA, you may want to delay Part A too, which you can do only if you aren’t receiving Social Security benefits.

Can I delay Medicare if I’m covered by my spouse’s job plan?

Yes, the same rules apply if the coverage comes from your spouse’s current employment, including the 20-employee test.

Does retiree coverage let me delay Part B?

No. Retiree coverage isn’t based on current employment, and most retiree plans pay second to Medicare and expect you to have Part B.

What if I start Social Security while still working?

You’re enrolled in Part A automatically and can’t turn it down without paying back your benefits, so stop HSA contributions before you start Social Security.

Sources

Official sources only, checked October 22, 2026.

Medicare.gov, “When does Medicare coverage start?” (Part A retroactive coverage, Part B Special Enrollment Period, COBRA) — medicare.gov.
CMS, “Enrolling in Medicare Part A & Part B” (publication 11036) — medicare.gov PDF.
IRS Publication 969, Health Savings Accounts — irs.gov; 2027 HSA limits — irs.gov PDF.
Medicare.gov, “Avoid late enrollment penalties” — medicare.gov.

Educational information, not tax, legal or financial advice. We are not connected with or endorsed by the U.S. government or the federal Medicare program. · Advertiser disclosure